The pound is anxiously awaiting the first autumn budget from the Labour party in 15 years. Chancellor Rachel Reeves will announce new measures in the House of Commons this afternoon that are thought to include tax rises for employers and allow for greater government borrowing.
These relatively drastic measures (at least in terms of the UK’s recent history) could provide a shock for the pound and markets are bracing for volatility. Sterling managed to stay stable yesterday, recording slight advances over its main rivals. The reaction to the budget will dictate whether that strength remains or dissipates this week.
German consumer confidence climbed to its highest level since April 2022, according to October’s GfK consumer confidence study. Income expectations rose alongside consumer willingness to make purchases in the latest ray of sunshine for the much maligned German economy.
US job openings came in below expectations in September, which allowed European currencies to rally against the US dollar. The number of vacancies fell by 418,000 to 7.43mn in September, the lowest level since way back in January 2021.
Despite the lower job figures, US investors are now their most optimistic about the outlook for the stock market since the 1987 “Black Monday” crash (an ironic comparison that won’t be lost on many). The Conference Board’s confidence index shot up to 108.7 this month, far beyond the 99.5 economists had expected.
The French economy grew at an annualised rate of 1.3% in the third quarter of 2024. Boosted by hosting the Olympics, economic growth well exceeded the expected 0.7%.
Donald Trump’s team sought to contain the fallout from the racism row that followed a comedian’s joke at a campaign rally on Sunday. His campaign sought to limit anger in the Puerto Rican community in Pennsylvania, one of the most important states in next week’s US election and one in which polling remains in a statistical dead heat.
Make sure any upcoming transactions are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract; call your account manager on 020 7898 0541 to get started.
